Housing lurches from crisis to utter chaos in NSW

The housing crisis in New South Wales has become something more. It’s a real estate house of horrors. The sheer number of people seeking, and unable, to secure a home presents a clear threat to their health, safety and well-being.

Additionally, the evidence is clearly showing that young people seeking their first home are leaving NSW in the search of an affordable property. Arguably, and more alarmingly, our essential service people are also finding it increasingly difficult to live in NSW.

This qualifies as a humanitarian crisis. There are simple, unambiguous and highly troubling figures that highlight its extent and no amount of debate on ‘reasonable grounds’ evictions, negative gearing and rent caps should distract us from the truth.

As at 31 March 2024, the number of bonds held by the NSW Rental Bonds Board was 970,428. As at 30 September 2023, the number was 966,172. That’s an increase of 4,256 homes rented in the past six months.

The most recent ABS migration figures (up to the September 2023 quarter) show that the number of additional people who came to NSW from overseas in the year was 186,433. That’s a net gain, which takes into account departures.

So, on average, NSW must accommodate a net increase of 15,536 people each month. Each month, on average, only an additional 709 properties are rented.

In the world we now live it is said data is the decision maker. The political class needs to listen to the data because it’s screaming out loud.

It is true that some of these additional rented homes may accommodate several people, whether safely, legally, or not. But it’s also true that increased net migration is only one demand factor. What about domestic drivers, like people simply looking to move out of the family home?

Housing crisis unravelling by the month

The gulf between these numbers lays bare the crisis. Each month it compounds. This state’s housing system is not approaching a breaking point. It is already broken. Ask anyone living in their car or on the street.

There is merit in seeking to promote and protect renters’ rights. The REINSW has consistently made the point that the rights of renters are best protected by encouraging investment in residential property, not by positioning renters against landlords in some kind of manufactured adversarial contest.

The numbers back this up: the more investors choose to put their money into other assets, the fewer homes there are for people to rent.

However, as the tens of thousands of people in NSW seeking a place to rent swells into the hundreds of thousands, these manufactured debates become ever more irrelevant.

Increased investment in homelessness services and other societal interventions may alleviate some of the symptoms of the crisis but only a broad scale increase in housing supply will break the cycle.

Urgent housing supply, reforms needed

This is the single greatest challenge the Chris Minns Government faces. Repeatedly saying it’s a problem isn’t putting a roof over anyone’s head. We need courage and leadership. So, what’s the plan?   

Yes, it’s a long-term challenge but there are short-term options.

The cost and delay in gaining building approval would be laughable if it wasn’t so damaging. The government should say to local councils, “this is our service level expectations and if you don’t meet them, we will take planning away from you”.

The immediate focus must be to reduce the cost of delivering new housing. Property taxation reform is a lever the Minns Government can, and must, pull now.